E-Financial
FXTM Hints on Emerging Currency Outlook 2016
The year that was 2015 saw emerging currencies challenged by a resurgent USD powering up alongside the US economic recovery, which added to the challenges faced by commodity-linked emerging economies amid a global slowdown in Oil and Gold prices and additional concerns over how a slowing down China economy would impact the general sentiment towards the emerging markets.
The results were a clear downward trend for emerging currencies and we continued to highlight emerging market currency weakness as a global phenomenon throughout 2015.
The emerging market currencies which were the most heavily crushed during the year were those that belonged to economies dependent on commodity exports, therefore the Indonesian Rupiah, Malaysia Ringgit and Nigerian Naira fell victim to this.
The USDIDR plunged from 12428 in January to 14733 at the end of the year, while the Malaysian Ringgit exploded into astonishing weakness and the USDMYR sky-rocketed from 3.4950 to 4.4580 by the end of the year.
The Nigerian Naira appeared vulnerable to extreme losses as 2015 commenced, but a controversial move to ban USD deposits likely prevented further currency weakness and at least improved domestic demand for the Nigerian currency.
Another huge contributor behind the losses in the emerging market currencies globally were the intense concerns surrounding the China economy entering a deep slowdown.
From the second half of 2015 we pointed out that a slowing down China economy was not a problem for China itself, but for all those economies reliant on trade with China and this helped the weakness in the emerging markets accelerate as 2015 drew to a close.
From a domestic standpoint, the China economy is still performing and from recent data we can see that there is no hesitance from consumers to spend in retail, and I still believe that citizens living in China will only become concerned by economic weakness if it begins to hurt employment prospects.
The major bright spot for China in 2015 was the Yuan being added to the prestigious SDR basket from the IMF, which underpins how critical China has become to the global economy regardless of its own reduced GDP growth.
Despite the SDR introduction for the Yuan, the trend for the China currency will remain weak throughout 2016.
The SDR introduction is positive for understanding the longer-term prospects for China within the global economy, but it does not prevent the domestic economy from continuing to experience reduced growth in the short to mid-term.
The People’s Bank of China (PBoC) will continue to take measures to improve economic fortunes for China, which we believe will include a gradual further depreciation of the Chinese currency.
This is a strategic move from the PBoC, with the aim of enhancing export competiveness and encouraging consumers to stop looking for products abroad and to instead consume domestically.
If however consumers still chose to import from overseas they will incur higher import costs which will improve another area of concern for the China economy, slowing inflation.
The only emerging market currencies that did not suffer steep losses in 2015 were those that were pegged to the USD, which became very supportive towards the UAE Dirham (AED).
Local equity markets have suffered due to depressed commodity prices as expected, however the losses were not as intense as they could have been due to the USD peg.
While the local economy will encounter lower growth with dramatically lower commodity prices, investors can use the benefits of the USD peg to consume products from abroad, such as with the Euro and Pound, to boost overseas consumption.
As we look towards 2016, the major turning point for all the emerging currencies will in some ways be in response to higher interest rates from the United States, but in my view it will be how they respond to a new environment of reduced economic growth which will be important.
While it is largely true that the reasons behind the huge falls in the emerging market currencies were due to external factors, 2016 could see these external factors transform into internal and domestic pressures such as reduced spending power and reduced budgets that might lead to jobs being lost.
The continued depression in the commodity markets is also going to limit any potential for a recovery in fortunes.
Slowing growth will continue to occur in China and will likely be a threat to India, although it is very possible that the proactive easing of monetary policy from the Reserve Bank of India might encourage borrowing domestically and help drive growth.
It is worth remembering that the central banks in China and India have been actively intervening to shore up their own economies through monetary easing and there will be some hope that this could help drive industry growth and that as commodity importers, the lower import costs should help create budget for investment elsewhere.
As long as the USD strength and commodity price weakness persists, emerging currencies will continue to experience downward pressures into the first quarter of 2016.
Another factor in play is a further increase in the US interest rates, which would likely lead to even more downward pressures on the Chinese Yuan, Nigerian Naira, Malaysian Ringgit, Indian Rupee and Indonesian Rupiah.
I do believe that as the emerging economies begin to encounter their own reduced domestic growth that this could weigh on outflows and threaten demand for their currencies even further.
Any black swan events in emerging economies or increased geo-political tensions in 2016 will also be more than enough to create uncertainties in the markets and this will impact both the emerging and Asian currencies.
The current threat of a possible black swan event would be removing the peg from the Saudi Arabian Riyal, which would create huge uncertainties throughout the GCC and Middle-East markets.
It would also further weaken the outlook for oil prices because market participants would see the move as the Saudi government choosing to devalue its currency rather than cut oil production.
However, it is important to stress that we do not expect such a move as of yet and this is more of a risk that investors could choose to monitor in case it impacts their investment portfolio.
Jameel Ahmad is the Chief Market Analyst at FXTM
A surge in cryptocurrency fraud has prompted the Securities and Exchange Commission (SEC) to strengthen its monitoring measures.
The regulator has partnered with blockchain analytics firm Chainalysis to improve its ability to detect and disrupt illicit activity.
This move follows growing concerns about the security of Nigeria’s expanding digital asset market.
At a joint webinar themed “Combating Scams with Blockchain Intelligence,” Dr. Emomotimi Agama, director-general, SEC, stressed the need for coordinated action.
He said transparency in crypto transactions should be the foundation of enforcement in the sector.
Agama warned that without collaboration, fraudulent activity could grow more dangerous in the future.
The SEC plans to use blockchain’s permanent transaction records to trace and monitor illicit movements of funds. This will include identifying wallet clusters, tracking fund transfers, and analysing transaction histories on networks such as Bitcoin and Ethereum.
Agama said these measures would help the commission detect scams earlier and respond faster.
The Chainalysis 2025 Crypto Crime Report provided data that reinforced the urgency of the SEC’s initiative.
According to the report, illicit crypto addresses received $178 billion worldwide over the last five years.
The highest volume was recorded in 2022, with $54.3 billion, followed by $46.1 billion in 2023 and $40.9 billion in 2024.
Agama said these figures showed the scale of the problem and the need for advanced analytics in enforcement work.
He also noted that Nigeria must improve its technical capacity to match the sophistication of modern financial crimes.
The partnership with Chainalysis is expected to help bridge this capability gap.
The SEC is working under the framework provided by the Investment and Securities Act (ISA) 2025, which took effect in April.
Agama described the law as a key step toward establishing clear rules for the digital asset market.
It also enables cooperation between Nigerian regulators and international partners without discouraging innovation.
He called for active collaboration between regulators, technology providers, and industry players to address fraud before it escalates. “
With all the various tools at our disposal, we must brace up for the challenges ahead,” Agama said.
He added that the collective goal should be to stop criminal activity at its source.
The SEC’s collaboration with Chainalysis is positioned as a strategic move to safeguard investors and improve market integrity.
It reflects an effort to place Nigeria among regional leaders in regulated digital finance.
By integrating blockchain analytics into its operations, the commission aims to create a safer environment for crypto transactions in the country.
World Bank has said that it has given approval of $300 million to fund a new project aimed at bolstering access to services and economic opportunities for internally displaced persons (IDPs) and their host communities in northern Nigeria.
In a release, the World Bank said the Solutions for the Internally Displaced and Host Communities Project (SOLID) was approved on August 7.
It stated that the project will adopt an integrated development strategy to help displaced persons and host communities transition from humanitarian aid to self-reliance and resilience.
It also said the ongoing conflict and insecurity in the region have displaced more than 3.5 million people, straining infrastructure and deepening competition for scarce resources in affected communities.
The bank said SOLID will build on previous government and partner interventions, including the multi-sectoral crisis recovery project (MCRP), which focused on emergency recovery.
“Key areas of focus include building climate-resilient infrastructure, promoting social cohesion, supporting livelihoods, and strengthening institutions to better respond to the pressures of forced displacement.
“We are glad to support this initiative which has a tremendous potential to help Nigeria in addressing development challenges associated with protracted displacement in a sustainable way,” Mathew Verghis, World Bank country director for Nigeria, said.
“The Project’s integrated approach which is aligned with the National IDP Policy and the FGN’s long-term development vision will ensure that IDPs and host communities can transition from dependency on humanitarian assistance to self-reliance and resilience which will open up better economic opportunities,” it added.
The World Bank, which noted that the cproject is expected to benefit up to 7.4 million people, of whom up to 1.3 million individuals are identified as IDPs, added that the project will be implemented through a coordinated, community-driven approach involving all tiers of government, with strong partnerships from international stakeholders.
United Bank for Africa (UBA), Plc, Africa’s Global Bank, has launched its revamped Group website to enhance users’ digital experience.
The newly revamped website boasts of a faster, smarter, and more dynamic digital platform, designed to deliver live news updates, real-time Nigerian stock prices, and a world-class user experience among other world-class features.
The upgrade marks a significant leap in the bank’s digital transformation journey, setting new standards for speed, accessibility, and innovation in the African banking industry.
Alero Ladipo, group head, Marketing and Corporate Communication, UBA, who spoke excitedly about the revamped website, explained that the redesign focuses on simplifying user-journey, improving responsiveness across all devices, and incorporating a language-agnostic interface that caters to the bank’s diverse global audience.
She explained that with its sleek, intuitive layout and enhanced navigation, the site empowers customers, investors, and stakeholders to access critical information instantly – whether it is the latest market movements, breaking financial news, or UBA’s wide range of products and services.
Ms Ladipo said, “We are thrilled to unveil our new website, which represents a significant milestone in our digital transformation journey. Our goal is to provide a world-class digital experience that meets the evolving needs of our customers and stakeholders.”
Continuing, she added, “A major highlight of the upgrade is its speed, powered by an upgraded server infrastructure with enhanced load balancing to ensure minimal downtime and lightning-fast performance. By combining speed, accessibility, and live market intelligence, our new platform strengthens our position as an industry leader.”
She pointed out that the site also integrates automated news updates powered by International agency, Bloomberg and real-time stock prices tracking, ensuring visitors remain informed at all times.
Throwing more light on the new features, Amanda Oguamanam, head, Digital and Online Marketing, UBA, said; “We have transformed our website to be faster, cleaner, and more engaging, removing clutter by over 60%, upgrading servers for speed and reliability, streamlining navigation, and tailoring content to inspire global partners while making it easier for customers to find what they need.”
Other standout features, she added, include improved accessibility for users with disabilities, dark/light mode toggle, advanced search functions, and a simplified content structure, which are all designed to deliver an inclusive, modern experience for a global audience.
The revamped website is live and accessible at www.ubagroup.com.
United Bank for Africa is one of the largest employers in the financial sector on the African continent, with 25,000 employees group wide and serving over 45 million customers globally.
Operating in twenty African countries and the United Kingdom, the United States of America, France and the United Arab Emirates, UBA provides retail, commercial and institutional banking services, leading financial inclusion and implementing cutting-edge technology.
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